What Silicon Valley Is Doing To Hollywood

A new report by Citi analyst Jason Bazinet discusses the major changes that the Internet has had on the movie and video business. The Internet has disrupted Hollywood perhaps like nothing else in history, and the transition is still underway.

Three Flavors

Netflix, Inc. NFLX 0.76% has pioneered Internet video since it began its transition from DVD-mailing to streaming back in 2008. In subsequent years, three types of Internet video business models have been established.

The first model type is the subscription on-demand model that is used by Netflix, Hulu and Amazon.com, Inc. AMZN 0.61%. These companies typically charge around $10 per month for content.

The second model type is Web-based services that offer streams of traditional cable network content. Dish Network Corp DISH 0.85% and Sony Corp (ADR) SNE 1.55% currently offer this type of service.

Finally, services like HBO Now, Showtime and CBS Corporation CBS 0.11%’s CBS All Access provide access to a single channel of online content.

Internet Changes Everything

For incumbents in the media space, new Internet competition seems…

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